Commerce Commission considers deregulating copper network
The Commerce Commission is weighing up whether or not it should deregulate the copper network, still used for internet and landline in 80,000 rural premises.
In a submission to the Commerce Commission after the release of its draft report on the Market Study into Personal Banking Services, RWNZ says the closure of physical branches in rural communities has impacted and even discouraged customers’ service switching behaviours.
“Access to face-to-face services is an important criterion in comparing service options and potentially for consumers in selecting a transaction account that best meets their needs,” the submission says.
The market study was commissioned in June last year, looking at whether competition for personal banking services in New Zealand works well and what can be done to improve it.
The draft report, released earlier this year, found that a reduction in the number of physical branches can lead to greater financial exclusion because of numerous factors, including time and travel costs to get to the nearest bank branch, lack of reliable internet and mobile coverage in some rural areas, and the requirement for sound digital literacy.
In its submission, RWNZ asserts that internet and mobile coverage’s reliability and capacity is inconsistent across New Zealand.
“This inconsistency puts people in rural areas at a disadvantage, particularly where it limits (and potentially discourages) their participation.
“Moves to digitise personal banking services (such as moves to increase use of internet banking and mobile apps) will need to take account of connectivity issues for rural consumers to ensure they are not excluded by such changes.”
ASB head of rural banking Aidan Gent says that currently over 90% of the bank’s rural customers bank digitally.
“So, the number of people, as opposed to two or three years ago, is significantly lower,” he told Rural News, adding that there are many more things that can be done online than previously.
He says that rural broadband products like Starlink have made the internet “a lot more accessible”.
“Five years ago, I’d have said it was a lot more challenging,” he adds.
Commerce Commission chair John Small says many of the issues it identified in the market study are systemic so its draft recommendations aren’t “quick fixes”. Instead, based on the recommendations, the Commission would expect to see sustained improvements over time.
“Ultimately, we want New Zealanders to be better off and confident that they are getting great value, clear choices, and innovative offerings in their banking services,” Small says.
Consultation for the Draft Report has now closed, with a final report due for publication in August 2024.
